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The global trading system is starting to rearrange itself

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Re: The global trading system is starting to rearrange itself

#21

Post by lainga »

sdfghswe wrote: post #12

> Biden’s “friend-shoring” initiatives What's CRAZY to me is why this hasn't always been the case. Who thought it was a good idea to depend on unfriendly countries like China? Right, I know who thought that. Those who also claimed "if we trade with them enough, they'll like us" did. Fuck depending on China, or Russia, for that matter. The West should have all its critical dependencies within it. At most we could get…

It was Bush Senior, Clinton (with PNTR), Bush Junior. The story of why the US thought PNTR was a good move is long, and has to do with the events of 1989. Also... Jiang Zemin and Hu Jintao were both very different from who we have today. China was not necessarily friendly, but they thought there was a good chance of them becoming friendly, especially if their market opened up. For several years after Tiananmen, the Democrats in Congress actually wanted sanctions against the PRC, but it kept getting vetoed, so as not to torpedo the chance.

Re: The global trading system is starting to rearrange itself

#22

Post by bluGill »

Jupe wrote: post #3

> This will take time. Decoupling is not an instantaneous process. China spent two decades becoming the workshop of the world; the rest of the developing world isn’t going to mirror that accomplishment in one or two years. It is all about dependency trees. The US decides to divert imports from China to other countries, which in turn may import from China. This reminds me of my day-to-day work so much; especially w.r.…

GM traces all their dependency trees down to the mines or other sources of raw materials. This is often 6-7 levels deep. However they know what to watch for in the news and so when something happens they can jump to find an alternate, which often gives them 3 months before the production lines stop.

They also do this so that they know nobody is using slave labor.

Re: The global trading system is starting to rearrange itself

#23

Post by woooooo »

throwawaymaths wrote: post #16
woooooo wrote: post #14

Earlier quoted context omitted.

They weren't unfriendly until we decided to make them so about 5 years ago. Policymakers in the late 90s couldn't necessarily predict swings in American opinion 20 years later.

Sure, but it's not like deciding to make china unfriendly wasn't provoked by china. The US was making legitimate attempt at "bringing china into the fold". Since xi jinping came into power, lots of sketchy stuff has happened on their end that made this strategy less tenable. For example: being invited to rimpac and then sending uninvited ships (2014)

It's possible to be perfectly cordial without being a US client state.

Why should they have to be "in the fold"?

Re: The global trading system is starting to rearrange itself

#24

Post by reisse »

throwawaymaths wrote: post #15
A_D_E_P_T wrote: post #8

Earlier quoted context omitted.

> It is all about dependency trees. The US decides to divert imports from China to other countries, which in turn may import from China. This is already happening with more than ~80% of products that are "Made in Vietnam" and at least ~40% of products that are "Made in Korea." Not only do the raw materials come from China, but most of the work is done in China. The product is shipped overland from a Chinese factory t…

> When all's said and done, Chinese factories haven't slowed down and Chinese GDP is still rising (by more than American GDP) which tells you that the "decoupling" has to be in some respect illusory. Can we really know that anymore? China has stopped publishing a majority of economic indicators.

If you don't believe Chinese statistics, you can check that US import from China is back to pre-COVID volumes and rising.

Honestly, I'm tired of this "oh they're totalitarian, so we cannot believe their statistics when it's good" stance. It looks so much like a comfortable self-deceit.

Re: The global trading system is starting to rearrange itself

#25

Post by dgb23 »

EGreg wrote: post #18

If there’s one broad consensus in American policymaking circles today, it’s that global supply chains need to become less dependent on China. I agree, and the other way, in many BRICS and other countries, there is a broad consensus that global economies need to become less dependent on US Dollars. Both efforts at decentralization and lessening concentration of power are probably going to lead to new good results, as…

What's the rationale behind this? Why specifically China?

Re: The global trading system is starting to rearrange itself

#26

Post by diego_moita »

Funny how things change.

In the 90s the U.S., EU and Japan were the champions of free trade for industrial products and services.

However, when it would come to agricultural goods they were the champions of tariffs and protectionism. Why? Easy: because 3rd world countries were very competitive on agriculture. Egypt had better cotton, Argentina had beef, Brazil had orange juice, Cuba had sugar, etc, etc.

3rd world countries would complain about the hypocrisy and the rich would reply that they should just shut up and give up on protectionism.

Now the whole Southeast Asia is competing with rich countries in industrial goods and protectionism is not protectionism anymore, is "decoupling".

Re: The global trading system is starting to rearrange itself

#27

Post by soligern »

A_D_E_P_T wrote: post #8
Jupe wrote: post #3

> This will take time. Decoupling is not an instantaneous process. China spent two decades becoming the workshop of the world; the rest of the developing world isn’t going to mirror that accomplishment in one or two years. It is all about dependency trees. The US decides to divert imports from China to other countries, which in turn may import from China. This reminds me of my day-to-day work so much; especially w.r.…

> It is all about dependency trees. The US decides to divert imports from China to other countries, which in turn may import from China. This is already happening with more than ~80% of products that are "Made in Vietnam" and at least ~40% of products that are "Made in Korea." Not only do the raw materials come from China, but most of the work is done in China. The product is shipped overland from a Chinese factory t…

That’s step one. Then the other developing companies will need to climb the dependency tree to make more and more of the materials locally. It’s what India did with car manufacturing, eventually building the entire vehicle in country. They are now the biggest exporter of tractors in the world. Same thing with pharmaceutical manufacturing as well. The space industry was the same way with imported tech from the Soviet Union but now it’s all built indigenously along with local advancements.

Re: The global trading system is starting to rearrange itself

#28

Post by soligern »

dgb23 wrote: post #25
EGreg wrote: post #18

If there’s one broad consensus in American policymaking circles today, it’s that global supply chains need to become less dependent on China. I agree, and the other way, in many BRICS and other countries, there is a broad consensus that global economies need to become less dependent on US Dollars. Both efforts at decentralization and lessening concentration of power are probably going to lead to new good results, as…

What's the rationale behind this? Why specifically China?

Too much dependency on a soft enemy?

Re: The global trading system is starting to rearrange itself

#30

Post by nradov »

EGreg wrote: post #18

If there’s one broad consensus in American policymaking circles today, it’s that global supply chains need to become less dependent on China. I agree, and the other way, in many BRICS and other countries, there is a broad consensus that global economies need to become less dependent on US Dollars. Both efforts at decentralization and lessening concentration of power are probably going to lead to new good results, as…

There is no consensus among the BRICS or other countries. All of them would like to have alternatives to the US Dollar for international trade settlement. None of them can agree on what that alternative should be. For example, there's no way that India will agree to widespread use of the Chinese Yuan.
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